In the dynamic world of real estate, understanding whether you’re in a buyer’s market or seller’s market can significantly affect your approach to buying or selling a property. Whether you’re a seasoned investor or a first-time homebuyer, a clear understanding of the market dynamics can empower you to make informed decisions and navigate the real estate landscape confidently.
Buyer’s Market or Seller’s Market Defined
What Is a Seller’s Market?
Fewer homes are for sale in a seller’s market due to tightened inventory, which increases demand and competition among buyers. That means you might get top dollar when you sell a home in this market.
What Is a Buyer’s Market?
In a buyer’s market, there are more homes for sale than buyers. That means it will be easy to buy in this type of market but a lot tougher to sell.
Seller’s Market Advice For Homeowners and Buyers
Sellers: What to Do When the Sparks and Reno Housing Market is Primed for You
Selling in a seller’s market means you’re likely to make a good profit on your home — and you’ll probably do it quickly! Here’s how to get started.
- Price Your Home with the Market in Mind: You want to price aggressively in a seller’s market, but don’t get too overzealous. Talk with your real estate agent about comparable homes to set the right price. If your home’s not selling, you might have to come down in price a little.
- Stage the Home: Don’t use a seller’s market as an excuse to slack off on cleaning and staging that you’d typically do when you sell a home. If you want to get the best price, you’ll still need to put as much effort into your presentation as you would if you were in a buyer’s market.
- Get Ready for Multiple Offers: Multiple offers can be great for your bottom line but can also be overwhelming! Should you counteroffer to try to get an even higher sale price? Does the highest bidder need to move more quickly than the next? Who has contingencies, and what are they? Talk with your real estate agent about all the likely scenarios so you can start thinking about what you’d do in each situation before it comes up.
- Be Prepared to Be a Buyer: Unless you’re moving into your second home or you’re prepared to rent, selling your house will mean you’ll quickly become a buyer. Since your area is in a seller’s market, you shouldn’t waste time looking for your next home. Start the process while yours is still on the market so you don’t get left out in the cold.
Tips For Navigating a Seller’s Real Estate Market as a Buyer
While buying a home in a seller’s market requires buyers to be strategic and flexible, with the right mindset, you can still find a great home in your price range.
- Be Open-Minded: You can picture the perfect house, but that home might not exist in this market in your budget. So, you’ll need to keep an open mind about the types of homes your real estate agent is showing you. Sure, it’d be great if you didn’t even have to paint once you move in, but in this market, you’ll have to ask yourself how much a 100% move-in ready house is worth.
- Make a Reasonable Offer: It’s in our nature to want to get a good deal. But a seller’s market isn’t the time to experiment with super low offers. Remember, another buyer is waiting behind you who’s willing to pay the asking price—if not more.
- Get Pre-Approved: We always recommend getting pre-approved before you start your home search, but it’s even more critical in a seller’s market. Not only does it show a seller that you’re serious about buying a house right now, but it also shows them that you’re financially able to buy theirs.
- Act Quickly: Once you put in the offer, ensure you’re always available to your real estate agent. Even if she put the offer in at 9 a.m., she might need to contact you at 9 p.m. to present a counteroffer.
How to Make the Most of a Buyer’s Market in Real Estate
Selling Your Home in a Buyer’s Market
Selling in a buyer’s market can be an exercise in patience. But if you set your expectations and put in the work, you can attract the right buyer.
- Set Reasonable Expectations About Your Price: Work with your real estate agent to determine where your home should be priced in this market. Your potential buyers are looking at comparable homes in your area, and you should be, too.
- Clean and Stage: Buyers are going to be extra picky. During a seller’s market, it might not matter if you left the bright green paint on your kid’s room walls or if the carpet had a few minor stains on it. Ensure everything is immaculate and buyers can walk in and picture themselves living there. Start by:
- Painting the walls a neutral color
- Removing any family pictures from the walls and tables
- Decluttering and organizing
- Putting clothes and jackets, you don’t need into storage, so the closets look bigger
- Set Up Your Curb Appeal: If the outside of your house isn’t well-groomed, your potential buyers might have their minds made up before they even get in the house. A buyer’s market means potential buyers are less likely to overlook the little things and more likely to balk at all the mini-projects they see adding up around the house. So make sure you:
- Pressure wash your driveway and siding
- Update the landscaping
- Spray for any visible pests, like ants
- Fix any chipped or peeling paint
- Be Ready to Compromise: Remember, there are plenty of other homes that the buyer can get for a great deal. So, it doesn’t make sense for you to dig your heels in if the buyer has a reasonable (or even semi-reasonable) request.
- Add Incentives: Offer to cover closing costs, throw in the dining room table the buyer admires, or include a home warranty.
Tips For Buying a Home in a Buyer’s Market
There’s a reason people want to know the answer to the question, “When will it be a buyer’s market?” That’s because when you’re a buyer in a buyer’s market, the world is your oyster! Here’s what to think about.
- Be Ready to Negotiate: If you were hoping to pay less than the asking price on a house, then now’s the time! Talk with your real estate agent to decide on a reasonable offer and how much you’re willing to increase. You might even want to put an escalation clause in your offer. That allows your real estate agent to slowly increase your offer up to an agreed-upon point, which means you won’t have to answer a million phone calls in the middle of the workday day to seal the deal.
- Keep An Eye on the Market: Sure, you’re in the driver’s seat now, but that can all change in a couple of months if home inventory in your area starts to disappear. Make sure you don’t miss your window and find yourself suddenly in a seller’s market.
- Look For Price Reductions: A seller is much more likely to reduce their home’s price during a buyer’s market. Be sure you’re checking the listings often to find homes with newly reduced prices. And don’t forget to let your real estate agent know that you’re interested in price reductions so she can keep an eye out, too.
This article was based on a post by Mortgages.com.
Whether it’s a buyer’s market or a seller’s market, one thing remains constant: the importance of staying informed and working with a trusted real estate partner. At Dickson Realty, we pride ourselves on our expertise, integrity, and commitment to helping our clients achieve their real estate goals, regardless of market conditions.
